Tiger's Sponsorships Might Be in Jeopardy

As golfer Tiger Woods' once-sparkling world continues to crumble around him, the latest news reports suggest that some of his corporate sponsorships are in jeopardy.

His relationships with Gillette, Gatorade and Accenture are possibly at risk, even as Woods' agent, Mark Steinberg, works overtime to salvage the multimillion-dollar deals, according to the Daily Beast.

Steinberg is trying to help Woods save face and wants the companies to state publicly that they "had full faith in Tiger and backed him completely," according to the news Web site, based on comments from people at two sponsors.

Play

null

Nike appears to be standing behind the star but Steinberg is having less luck with Gillette, Gatorade and Accenture, the Daily Beast said.

Indeed, Gatorade dropped its "Gatorade Tiger -- Focus" drink earlier this week and initial reports suggested that the PepsiCo Inc. subsidiary made the decision months ago because of poor sales.

But that's just PR, according to the Daily Beast.

"One insider at the company, who asked for anonymity, says that Gatorade seized on the golfer's travails as an opportune time to announce the break from a deal that had already gone bad," wrote Daily Beast investigative reporter Gerald Posner, adding that Steinberg had lobbied intensely to rescue the $100 million, five-year deal.

Nike Stands by Its Golfer

Nike remains committed to its $105 million, five-year deal with Woods, the site reported, possibly, in part, because it contains a $10 million early termination penalty.

The Wall Street Journal, meanwhile, reported that advertisers are taking a "wait-and-see" attitude before making any major changes. Although sponsors are likely to pull ad campaigns featuring the star until the scandal loses some steam, they are unlikely to drop him cold, the newspaper said.

News about the scandal continues to trickle in and sponsors don't want to make rash decisions without having a full understanding of what happened, according to the Journal.

When Olympic swimmer Michael Phelps was caught smoking pot earlier this year, for example, the Subway sandwich chain took its time in assessing the potential fallout and eventually decided to continue its deal, the Journal noted.

Since Woods' sex scandal began making headlines two weeks ago, observers have been closely watching for the response of his sponsors.

Early on, when it appeared that Woods was cheating on his wife with just a few women, four companies -- Nike, Gatorade, Gillette and Electronic Arts -- issued statements of support.

Also, television advertisements featuring Woods seem to have dropped off, according to research firm Nielsen.

There's no hard-and-fast evidence that any company has actually pulled ads, but a Gillette spot featuring Woods aired eight times in November and for the last time Nov. 29, two days after the scandal broke, according to Nielsen.

The data only measures which ads were aired on 23 major channels during certain prime time, late night and weekend slots.

Woods' image as a family man has been tarnished by reports of his apparent extramarital affairs. The stories began Nov. 27, when Woods drove into a fire hydrant outside his home in Windermere, Fla., possibly after an argument with his wife, Elin Nordegren.

Woods' Market Value Drops

Retailers wonder if fans of Woods are now thinking twice about buying his autographs and branded golf shirts.

"People are nervous about paying $1,000 for his signatures because their value might go down," said Mike Gallucci, vice president of operations at SportMemorabilia.com, a large vendor of sporting souvenirs.

He said sales of Woods photos, pin flags and clubs have dropped by almost half.

"Around Christmas, you get a lot of parents buying for their kids and if they don't view the athlete as a role model, their purchases go down," he said.

Woods' legendary golf skills propelled him to the top of many corporations' wish lists as a star endorser. He has earned more than $100 million annually and, according to Forbes magazine, more than $1 billion in his career thus far, thanks partly to his endorsement deals.

Other athletes such as Kobe Bryant, who was accused of rape in 2003, have sometimes taken years to repair their images.

The case was dropped but not before he admitted an adulterous sexual encounter with his accuser.

Bryant lost an endorsement deal with McDonald's in 2004 after the fast food maker refused to renew his contract.